PPG Again Raises Bid for Akzo Nobel -- 2nd Update
April 24 2017 - 8:51AM
Dow Jones News
By Christopher Alessi and Austen Hufford
Paints giant PPG Industries Inc. on Monday again raised its
offer for Dutch rival Akzo Nobel NV, the U.S. firm's third takeover
attempt in a two-month long, unsolicited courtship.
PPG increased its offer price for Akzo to EUR96.75 ($105.07) a
share, up from its bid last month of EUR88.72 a share, valuing the
proposed transaction at roughly EUR24.6 billion. PPG's initial
approach at the start of March was at EUR83 a share.
Akzo confirmed in a statement Monday it had received PPG's
updated offer and would "carefully review and consider" the
proposal.
Pittsburgh-based PPG said the new bid values Akzo at a premium
of 24% over its closing price of EUR78.20 a share on April 21, the
last full day of trading before the revised offer.
That was just days after Akzo unveiled the details of a new
strategy to separate its specialty chemicals unit, which is part of
Chief Executive Ton Büchner's ongoing effort to ward off PPG.
Mr. Büchner has repeatedly refused to engage with PPG, calling
the first two takeover offers inadequate.
The company told investors on April 19 that it plans to pursue a
dual-track process to have the option to either spin off the
specialty chemicals business as a separate listed entity or sell it
outright, to be completed within the next 12 months.
Akzo's stock was up almost 5% on Monday.
The Dutch firm first announced last month that it planned to
separate the chemicals business, when it disclosed PPG's
interest.
Mr. Büchner said the "vast majority" of net proceeds from the
separation of the chemicals business would be returned to
shareholders. Pretax proceeds from the move could be roughly EUR8
billion, according to analysts.
Akzo said it is targeting increased shareholder returns and
plans to issue a EUR1 billion special dividend to shareholders in
November, with a 50% increase on the regular dividend to EUR2.5 a
share.
PPG's latest offer comes as Akzo is warding of an effort by some
of its largest investors, including activist investor Elliott
Management Corp., to push the Amsterdam-based company to engage in
negotiations with PPG.
Elliott earlier this month called for a special meeting of
Akzo's shareholders to try to oust the chairman of the supervisory
board. Akzo responded by saying it strongly supported Chairman
Antony Burgmans and would reject an agenda item seeking to dismiss
him.
The company hasn't yet said whether it would agree to hold the
extraordinary meeting.
Speaking with The Wall Street Journal last week, Mr. Büchner
said that unlike PPG's takeover proposal, his plan to separate the
specialty chemicals division and create value for shareholders
offers a "certainty of execution."
PPG said Monday that its most recent proposal "is vastly
superior to Akzo Nobel's new stand-alone plan."
The latest offer appeared to address some of Akzo's concerns
over how a takeover could impact its stakeholders, including
commitments to maintain Dutch jobs and a promise not to relocate
any of the Dutch firm's European Union production facilities to the
U.S.
"We think the revised offer will be very difficult for Akzo to
reject," analysts at Bernstein Bank wrote Monday. "We think the
most likely outcome is that Akzo grants PPG due diligence to enable
a slightly improved offer," they said.
Write to Christopher Alessi at christopher.alessi@wsj.com and
Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
April 24, 2017 08:36 ET (12:36 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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